Zambia Bank of Zambia Currency Directives 2025 — Chinese Yuan (RMB) Accepted for Mining Royalty and Tax Payments

Mechanism

The Bank of Zambia's Currency Directives 2025 establish a dual-currency channel for all mining sector fiscal obligations. Prior to October 2025, all royalties and corporate taxes owed to the Zambia Revenue Authority (ZRA) had to be settled in US dollars or Zambian kwacha. The directives extend the permissible settlement currencies to include Chinese renminbi, covering:

• Mining royalties — graduated royalty rates under Zambia's variable royalty

regime (5–10% of gross revenue depending on metal price band, per the 2022 MMDA Amendment Act)

• Corporate income tax — 30% CIT rate applicable to mining companies
• Mineral processing levy — applicable to concentrate processors and smelters

The December 2025 RMB-kwacha reference rate publication by BoZ operationalised the channel, giving ZRA a conversion benchmark for tax assessments denominated in yuan. Bloomberg confirmed (Dec 31, 2025) that Chinese mining companies had already begun settling obligations in yuan by end-2025.

The BoZ stated that Chinese mining companies — which operate Zambia's largest copper mines (Mopani, Lumwana via Barrick, Kansanshi/Sentinel via First Quantum, Lubambe via JCHX) — were already receiving export revenues in yuan from Chinese copper off-takers and facing costs denominated in yuan for Chinese equipment and consumables. Allowing yuan tax settlement eliminates a double-conversion cycle (CNY → USD → ZRA → KWA) that created exchange-rate friction and increased the effective dollar-debt burden on Chinese operators relative to their yuan revenue stream.

Downstream implications

• Supply chain traceability: mining tax flows now partially bypass the

USD-denominated interbank settlement system, reducing SWIFT-based visibility into Zambia's copper-sector fiscal receipts for Western counterparties and multilateral lenders (IMF, World Bank — both active in Zambia's 2023 debt restructuring).

• De-dollarization signal: Zambia becomes the first African resource state

to formally institutionalise RMB in sovereign mineral revenue collection — structural precedent for other Chinese-capital-heavy mining jurisdictions (DRC, Zimbabwe, Tanzania).

• IFI tension risk: Zambia's IMF ECF program (approved Aug 2023, 38-month

duration) requires fiscal transparency and USD-anchored revenue reporting. The BoZ move was not flagged in the IMF's 2025 Article IV consultation; the Feb 2026 ECF review will be the first post-directive checkpoint.

• Company-level impact: Western-listed companies with Zambian assets

(Barrick: Lumwana; First Quantum: Kansanshi/Sentinel) can in principle use their yuan revenue to settle Zambian taxes directly — reducing FX cost — but also deepens their operational integration into RMB infrastructure, with reputational and ESG-reporting implications.

• Copper FEOC risk: FEOC provisions under IRA §45X and EU CRMA

domestic-processing benchmarks require supply-chain tracing. Yuan-settled Zambian mining fiscal flows complicate "Chinese financial influence" determinations for FEOC classification of Zambia-origin copper.

Open questions

• Will the IMF's ECF review (Feb 2026 onward) flag the RMB fiscal channel

as a transparency-disclosure risk requiring BoZ reporting adjustments?

• Will ZRA publish RMB-denominated royalty receipts as part of EITI

reporting (Zambia is an EITI-compliant country)?

• Will other African mining states (DRC, Zimbabwe, Tanzania) follow with

similar RMB tax-settlement channels?

• Does the BoZ directive apply to non-Chinese mining operators, or is

it de facto limited to Chinese-owned mines by revenue-currency match?